State and local governments across the U.S. give Facebook millions in tax breaks in return for the social media company opening up data centers in their respective towns.
But the facilities, which house computer systems and other components, often don’t yield as many jobs as first expected, according to a Bloomberg report published Monday.
In Forest City, N.C., for example, where the social media company opened a $450 million data center in 2012, Facebook paid $13.9 million in taxes to Rutherford County, but eventually retrieved $13.5 million of it back through various grants. That doesn’t include the undisclosed millions the state gave in incentives, reports Bloomberg. Facebook is roughly valued at $500 billion, and the rural Rutherford County has a yearly budget of $64 million.
Facebook’s data center in the somewhat remote Forest City, which has a rough population of 7,500, employs around 275 people. A large portion, though, are contract security, with some coming from outlying districts even as far as Charlotte, according to Bloomberg, which is dozens of miles away. Many more are employed during the construction of a data center, however, as the U.S. Chamber of Commerce says the average one requires the employment of 1,688 local workers and also “provides $77.7 million in wages for those workers,” yielding substantial, albeit potentially temporary gains.
Town leaders assert that they didn’t have much of a choice — the economic struggles over recent years left them desperate for an economic catalyst.
Forest City reached an unemployment level of 19.8 percent during and around the recession several years ago, and has never really seemed fully able to climb out out of the trenches of economic despair. The median household income is $26,770 and approximately 34 percent of the town currently live at or below the poverty rate, according to DataUSA. Facebook built its data center on the site of a former textile mill.
“We were dominated by textiles, and when they all started leaving, all those jobs left,” says Tom Johnson, president of Rutherford County Economic Development, reports Bloomberg. “We were looking for an option to diversify the economy.”
The proliferation of Facebook’s data centers are affecting several other relatively small town-areas in the U.S., as the tech giant receives huge tax breaks in those localities as well. If it will lead to a proliferation, or at least a fairly significant uptick, in job creation is uncertain, if the dubious results of Forest City are emblematic or sign of things to come. (RELATED: NYT, WSJ, Other Media Want To Take On Google, Facebook For Hogging All Of The Money)
“Our mission of building community carries over into every one of our data center locations,” a Facebook representative told The Daily Caller News Foundation. “While we work globally, we live locally and are committed at each data center site to creating thousands of construction jobs and hundreds of long-term operational positions, sourcing labor and materials locally, and supporting projects in the region.”
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